These defendants failed to meet
their obligation to fully inform potential bond holders about WorldComs true
financial condition, Renkes said in a statement. We hope to restore money to
the State of Alaskas funds and send Wall Street a message that we will hold
them accountable if they abandon honesty for profits.

Renkes said he has hired a
California firm that specializes in securities matters to handle the case.

Two music labels sue Napster's
backers

Universal Music and EMI filed a
lawsuit against the venture capitalists who backed Napster Inc., claiming they
contributed to the copyright violations by millions of the song-swapping
service's users.

The two record labels filed the
lawsuit Monday in federal court against Hummer Winblad Venture Partners and two
of the San Francisco firm's general partners, Hank Barry and John Hummer.

The suit seeks punitive damages,
along with $150,000 per violation. It also is intended to dissuade investment
in any of the song-swapping services that have risen in Napster's place.

The suit alleges the venture
capitalists knew Napster was providing infringement to its users and that the
firm controlled Napster's activities through its $13 million investment in May
2000. Barry served as Napster's chief executive for more than a year and both
he and Hummer sat on Napster's board.

Napster filed for bankruptcy
protection in June. At its height, Napster boasted 60 million users.

Barry and Hummer anticipated they
might be sued and tried to negotiate protection from legal consequences when
German media firm Bertelsmann was planning to buy Napster early last year.
Those talks foundered, and Bertelsmann itself has been sued for its investment
in Napster.

HealthSouth manager says safeguards bypassed

Massive fraud that rocked
HealthSouth Corp. and led to criminal charges against 10 former executives was
accomplished using simple, manual entries in a computer system, according to
testimony in federal court in Birmingham, Ala., Tuesday.

Invoices received by the company
typically are entered into an advanced software system that conducts a
computer audit. The system also creates reports as it generates checks, said
Barbara Patton, who manages HealthSouths accounts payable department.

Patton said participants in the
fraud waited until monthly operating reports were completed by the computer,
allowing them to sidestep the systems checks and balances.

After the reports were completed,
the participants typed in false information elsewhere in the computer system
that was later merged into consolidated corporate statements.

Its real easy, said Patton, who
designed her departments systems of checks and balances but said she was
unaware of how the fraud was accomplished until she read media accounts.

Patton testified as U.S. District
Judge Inge Johnson considered whether to maintain a temporary freeze on the
assets of fired HealthSouth chief executive and chairman Richard Scrushy.

The U.S. Securities and Exchange
Commission filed suit last month accusing the company and Scrushy of
overstating earnings by $1.4 billion since 1999 to meet Wall Street
expectations. The amount increased to $2.5 billion since 1997 as investigators
went further back.

Ten former HealthSouth executives
have either pleaded guilty or reached plea deals with the government. Scrushy
has not been charged, but his attorneys have said he is the target of a
criminal investigation.

Under questioning from Scrushy
attorney Tom Sjoblom, Patton said she doubted Scrushy would have known about
the faked accounting entries she described.

Im not sure he was that
detailed, she said. You had to read the general ledger line by line to see
it.

While the government claims in the
lawsuit that Scrushy directed the fraud, Sjoblom contends Scrushy didnt know
about the scheme until two days before the suit was filed.

Founded by Scrushy in 1984, HealthSouth is a U.S. provider
of outpatient surgery, diagnostic and imaging and rehabilitative health care
services. The company has nearly 1,700 facilities and 51,000 employees
worldwide.